Binance stablecoin backer Paxos reportedly failed to safely issue BUSD, NYDFS says

Paxos Trust Company, the stablecoin issuer behind crypto exchange Binance's stablecoin ( BUSD-USD ), failed to safely administer the token, Reuters reported Monday, citing a spokesperson for the New York Department of Financial Services. The state's financial watchdog had earlier ordered Paxos to cease minting new dollar-pegged BUSD coins. Paxos in turn said it ended its relationship and stopped the issuance of BUSD. The company was said to have also caught the attention of the U.S. Securities and Exchange Commission amid increased scrutiny of the industry. Paxos "violated its obligation to conduct tailored, periodic risk assessments and due diligence refreshes of Binance and Paxos-issued BUSD customers to prevent bad actors from using the platform," the spokesperson told Reuters . The regulatory crackdown on the crypto space has been heating up in the wake of the fallout from crypto exchange FTX ( FTT-USD ). The SEC, for instance, recently charged crypto exchange Kraken for failing to register its staking program.